Topic: “Impact of Branding on Consumer Buying Behavior For Air-Conditioners”

Introduction

Traditionally, air-conditioners have been considered to be “luxury” appliances, and

therefore, the demand for air-conditioners have either come from the institutional
segment or from affluent homes in the top metropolitan cities of India. That‟s no longer
the case. While easy finance options have made air-conditioners more affordable,
companies are also going that extra mile to make air-conditioners a “must-have”
appliance in more and more middle class India homes.

Indians Spending Habit

Spending habits are different for people belonging to different sections of society. For
instance, people belonging to the middle class consider basic necessities and education
and spending toward the future of their children as their top priorities, followed by
lifestyle goods. The rich class spends more on luxury goods and international brands.
The super rich class spends on ultra luxury goods. It is observed that as disposable
income increases, people prefer more of branded goods, shift to processed foods, and
the expenditure on food, beverages, tobacco, and transport and communication also
increases. A comparison of consumer spending habits in 2002 with those in 2007
revealed that expenditure on food, clothing and personal care has remained more or
less constant, but expenditure on entertainment has increased.

Shopping habits of Indians are changing due to their growing disposable income, relative
increase in the younger population, and the change in attitudes towards shopping. The
emphasis has changed from price consideration to design, quality and trendiness. The
desire to look and feel good is also guiding factor for customers while making their
purchase decisions. Growing disposable income is also propelling demand for consumer
durables and eating in restaurants among Indians. Age is also a major factor that affects
the spending decisions of an individual. For instance, people in 20-24 years age group
spend more on electronic / home appliances and movies, while people in the 45-48
years age group spend more on vacations.

Consumer spending is an important factor that affects the economic growth and
development in a country. In the future, India and China are projected to be the
powerhouses of Asia in terms of growth in consumption, wages, and GDP.

Air Conditioner Market In India

The ongoing economic buoyancy in India despite global economic melt down has
offered opportunities for rapid growth of consumer durable industry, and in particularly
air conditioners and refrigeration industry.
In general, there are different types of air conditioners, but the broader classification was
room air conditioners and commercial range of air conditioners. The room air
conditioners category consists of both the window and split ACs for the use in residential
and commercial spaces.
The commercial air conditioning comprises of the ductable split ACs to large sized
chillers. This segment comprises of retail chains, MNCs, IT/ITeS sectors, BPOs, call
centres, institutes, malls, etc. The market is of around Rs 3,600 crore, and is growing
at the rate of approximately 25 per cent annually.Although the commercial air
conditioning segment has been tepid with the slow down in the new infrastructure
projects, the room air conditioners category was expected to perform well on the back of
extended summer. Around 35 per cent of the sales generally take place in summer, ie in
the months of April and May 09. Blue star which has recorded sales of around 1.5 lakh
units of window and split AC's in the fiscal ended March 09 is expecting a growth of
around 10-15 per cent in this fiscal. The subdued spending in metros has taken its toll in
the commercial air conditioning segment. However, expectations on the government
stimulus for the infrastructure will enhance the growth in this segment.

Literature Review

Consumer behaviour refers to the activities in which people acquire, consume and
dispose products and services (Blackwell et al., 2001). Owing to the proliferation of
brands in the recent decades, there is a growing number of research conducted in the
field of consumer buying behaviour. However, most of them concentrate on a single
country study, regardless of the importance of cross-country comparisons which will
inspire innovative ideas for understanding the fast-changing consumer habits. This
dissertation is going to investigate the differences of British and Chinese in purchasing
clothes under the influence of brand image.
In this chapter, the literatures concerning the roles of brand and brand equity are to be
reviewed so as to provide a theoretical framework for the aforementioned analysis.
Brand serves a pivotal role for distinguishing goods and services from those of the
competitors (Aaker, 1991; Murphy, 1998). The emergence of brand equity underlies the
importance of brand in marketing tactics and hence provides useful insights for
managers and further research (Keller, 2003). According to a research conducted by
Freeride Media LLC (1998) on shopping habits, nearly one-forth of the respondents are
likely to impulse-buy clothes and accessories. When deciding which products to
purchase, consumers would have their preferences, which are developed in accordance
with their perceptions towards the brand. Successful branding could make consumers
aware of the presence of the brand and hence could increase the chance of
buying the company‟s products and services (Doyle, 1999).
The characteristics of successful brands
A brand can be an everlasting and lucrative asset as long as it is maintained in a good
manner that can continue satisfying consumers‟ needs (Batchelor,1998; Murphy, 1998).
Although successful brands can be totally different in nature, they share something in
common, for instances well-priced products and consistent quality (Murphy, 1998). As
mentioned by Levitt (1983), there are four elements for builing a successful brand,
namely tangible product, basic brand, augmented brand and potential brand. Tangible
product refers to the commodity which meets the basic needs of the customers. Basic
brand, on the other hand, considers the packaging of the tangible product so as to
attract the attention from the potential customers. The brand can be further augmented
with the provision of credibility, effective after-sales services and the like. Finally and
most importantly, a potential brand is established through engendering customer
preference and loyalty. By doing so, the image of the brand could be well instilled in the
customers‟ mind.

Consumer buying behaviour

Many people do consume a wide range of products every day, from basic necessities to
high-valued collectables. Owing to the proliferation of productsin the market, such
phenomenon is one of the most interesting and henceheavily investigated topics in the
marketing field. As mentioned by Schiffman and Kanuk (2000), consumer behaviour is
about how people make their decisions on personal or household products with the use
of their available resources such as time, money and effort. Gabbott and Hogg (1998)
and Blackwell et al. (2006) further provide a holistic view that defines consumer
behaviour as the activities and the processes in which individuals or groups choose, buy,
use or dispose the products, services, ideas or experiences. The study of consumer
buying behaviour is of utmost importance in a number of aspects. First of all, consumer
behaviour can influence the economic health of a nation (Blackwell et al., 2006).
Consumers would have their preferences in purchasing products from specific retailers
and hence the remaining retailer are selected using the rule of „survival of the fittest‟.
Therefore, consumers‟ decisions can provide a clue for which industry to survive, which
companies to succeed, and also which products to excel. Second, through
understanding the reasons for consumers to buy the products and their buying habits,
the firms can make use of such information to devise corresponding marketing strategies
in response to the consumers‟ needs (Blackwell et al., 2006). For instance, tailor-made
products can be made to enhance customer value and thus facilitate repeat purchase
(Gabbott and Hogg, 1998). Moreover, present consumer behaviour studies regard
consumers as important determinants of organizational success and it is found that the
most successful organizations are customer-centric (Blackwell et al., 2006). The notion
„the consumer is king‟ should be deep-rooted in every business people‟s mind that they
should try to please these kings using their innovative methods.

Models of consumer behaviour

Several models are developed with a view to provide explanations for the consumer
buying behaviours. Although they vary in form of presentation, most of them are
composed of stages such as pre-purchase, purchase and post-purchase (Hoyer and
Maclnnis, 2001; Rayport and Jaworski, 2003). Blackwell et al. (2001) define consumer
behaviour as a summation of acquisition, consumption and disposal of products or
services. However, such definition falls short of the continuity of the processes. Based
on this loophole, Arnoud et al. (2004) further propose the circle of consumption that
recognize purchasing processes as a loop, comprising acquisition of goods and
services, consumption, as well as disposal of used goods.As far as the consumer
decision process model is concerned, consumers need to go through seven steps before
reaching their final decisions. These seven steps include need recognition, search for
information, pre-purchase, evaluation, purchase, consumption, post-consumption
evaluation and divestment (Blackwell et al., 2006). Rayport and Jaworski (2003) propose
a similar model with slight differences regarding the terms used. Blackwell et al.(2006)
add that most consumer research would primarily base on these seven stages and how
different elements affect each stage of consumers‟ decisions, regardless of the different
terms and consolidation of stages. Stage one is need recognition which occurs when an
individual is aware of a difference between their perception and the actual satisfaction
level (Solomonet al., 2006). The buying process is initiated when people recognize their
unsatisfied need (Levy and Weitz, 1992). There are two kinds of needs, namely
functional needs and psychological needs. Functional needs are related to the
performance of the product whereas psychological needs are intrinsically obtained when
customers feel contented with shopping or owning a product which they long for. Stage
two is the search of information. The length and depth of search vary for different
customers and depend on variables like personality, social class, income, size of
purchase, past experiences, prior brand perceptions (Moorthy et al., 1997), as well as
customer satisfaction. As mentioned by Solomon et al. (2006), search of information can
further be divided into pre-purchase search and ongoing search. Pre-purchase search is
initiated when consumers recognize a need and hence look for more information from
the marketplace. Ongoing search, on the other hand, is more likely to be based on
personalinterest on a particular brand. Customers pursuing this kind of search would like
to obtain the most updated information about the designated brand.
Stage three comes to the pre-purchase evaluation that consumers compare between
different products and brands to make a purchasing decision. In this stage, consumers
pay particular attention to the attributes which are mostrelevant to their needs (Kolter et
al., 2005). Attributes like quantity, size, quality and price are commonly used to judge a
brand by customers. Any changes in these attributes can affect consumer decisions on
brand or product choices(Blackwell et al., 2006). According to Porter (2004), firms can
create value by providing lower price or unique offers to the customers so as to excel
their competitive advantages over the others.Stage four refers to the purchase decisions
made by the consumers after evaluating the offers from different retailers. As stated by
Blackwell et al.(2006), there are two phases contributing to the decision making
processes,including retailer and in-store selection. Retailer selection is made by judging
which retailers to buy after investigating the attributes from the previous stage whereas
in-store selection is affected by the selling skills of salesperson, visual displays inside
the shops, as well as point-of-purchase advertising. In addition to in-store purchase,
Rayport and Jaworski (2003) further point out the significant impact of internet on
consumer purchasing decision. As pointed out by Dholakia and Uusitalo (2002), this new
kind of non-shop retailing format has begun replacing the fairly established catalogue
and TV shopping and itsdevelopment is rapid albeit it is more recently found in
comparison with the existing non-shop retailing modes. Stage five, stage six and stage
seven are under the category of the post-purchase stage. In stage five, customers begin
consuming the products whereas in stage six, customers evaluate the consumption
process. This gives rise to satisfaction when consumers‟ expectations are higher than
the perceived performance and vice versa (Blackwell et al., 2006). Last but not least,
stage seven comes to divestment, in which consumers dispose or recycle the products
and at the same time. The firms need to think about the possibility of remarketing. This
stage is crucial since customers could be possible to make repeat purchases provided
that they are satisfied with the aforementioned stages (Rayport and Jaworski, 2003).

Research Methodology

Quantitative versus qualitative analysis

Generally, research methods can be classified in a dichotomy between quantitative and
qualitative research. As far as the description and explanation of phenomena are
concerned, quantitative research focuses on analyzing numerical data whereas
qualitative research deals with meanings, examining the attitudes, feelings and
motivations of people (Babbie, 2004; Dey, 1993). In the field of research, qualitative
research is sometimes regarded as a relatively minor methodology than its quantitative
counterpart and there are some assumptions that only experimental data, official
statistics, random sampling and quantified data can lead to valid or generalizable social
facts. That is why it is suggested that qualitative research should be used more often at
the early or exploratory stage of a study (Silverman, 2000). Nevertheless, both of them
are not perfect in a sense that they need to serve as a complement to each other. As
suggested by Easterby-Smith et al. (2002), research needs a partnership and it could be
beneficial to collaborate rather than compete between the different kinds of research
methods. Both the quantitative research and qualitative research have their own
advantages and disadvantages. Quantitative research surpasses qualitative in a sense
that it can analyze data based on representative samples from a large population
(Proctor, 2000), having a complete set of categorization for the events or activities
described (Silverman, 2000). In this way, quantitative analysis is stronger than
qualitative analysis in that it can persuade readers with large-scale, numeric data. As for
qualitative research, it is more likely to look into people‟s in-depth feelings, for example,
attitude (Kirk and Miller, 1986). Unlike quantitative research, which uses ad hoc
procedures to define and measure variables (Blumer, 1956; Cicourel, 1964; Silverman,
1975), qualitative research tends to focus on describing the process of how we define
and measure variables in everyday life (Silverman, 2000). Qualitative analysis, however,
suffers from the problem of „anecdotalism‟ in which it just narrates some examples of
phenomenon without taking less clear data into account (Silverman, 1989). Besides, the
reliability of tape-recorded and transcribed data is argued by some to be weakened
owing to the possibility of missing some trivial but crucial pauses and overlaps
(Silverman, 2000).
Questionnaire (Retailers)

Q.1. How many different brands of AC are sold through your shop.

a.)2 b.) 3 c.)4 d.) More than 4

Q.2 You keep different brands on basis of?

a.)Brand Name b.) Features c.)Margins d.) Other

If Other than___________________________________________________________

Q.3 Which Is the top selling brand among Air Conditioners?

a.)Samsung b.) LG c.)Hitachi d.) Blue Star e.) Other

If Other than___________________________________________________________

Q.4 What could be probable reason for being best seller?

a.)Brand Name b.) Product Feature c.)Sales Promotion d.) Other

If Other than___________________________________________________________

Q.5 Does Brand name influences purchase decesion?

a.)Highly b.) Somewhat c.)Rarely d.) Never

Q.6 What is the role of retailer in influencing consumer purchase decesion?

a.)High b.) Medium c.)Low d.) Zero

Q.7